AZZ Incorporated (AZZ)
Cash conversion cycle
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 36.58 | 51.11 | 121.30 | 94.81 | 44.19 |
| Days of sales outstanding (DSO) | days | 37.47 | 50.58 | 115.98 | 97.31 | 47.85 |
| Number of days of payables | days | 27.36 | 29.92 | 23.89 | 42.39 | 27.44 |
| Cash conversion cycle | days | 46.69 | 71.77 | 213.39 | 149.74 | 64.61 |
February 29, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 36.58 + 37.47 – 27.36
= 46.69
AZZ Incorporated's cash conversion cycle has seen fluctuations over the past five years. In the most recent fiscal year, ending on February 29, 2024, the company's cash conversion cycle decreased significantly to 46.69 days. This indicates that the company is managing its cash flow efficiently, with a shorter period between paying suppliers and receiving cash from customers.
In the prior year, the cash conversion cycle was 71.77 days, showing an improvement from the fiscal year ending February 28, 2022, with a substantially longer cycle of 213.39 days. This suggests that AZZ Incorporated made operational adjustments to streamline its working capital management in the intervening years.
However, the company experienced a higher cash conversion cycle of 149.74 days in the fiscal year ending February 28, 2021, compared to the more optimal cycle of 64.61 days in the fiscal year ending February 29, 2020. This may indicate challenges in managing accounts receivable, inventory, and accounts payable during that period.
Overall, the trend in AZZ Incorporated's cash conversion cycle shows volatility but also demonstrates the company's ability to adapt and improve its working capital efficiency over time. By monitoring this metric, stakeholders can assess the company's operational effectiveness in managing cash flow and liquidity.
Peer comparison
Feb 29, 2024